The town council is holding a hearing on a special use permit application that would allow a small shopping center. The proposed site is on a major road and is adjacent to an existing residential neighborhood.

At the hearing detailed information is presented on the traffic impacts of the project, including a required traffic impact analysis, testimony from the applicant’s traffic engineer, and information from town staff. This evidence suggests the project as submitted needs to be modified to add a turning lane on the fronting street and a new traffic signal at the adjoining side street. The applicant is agreeable to adding these as conditions for approval. However, a large and vocal group of neighborhood residents appear at the hearing and object to the potential for additional traffic that might use the adjacent residential street. They ask the council to add a condition that limits vehicular access to the site to a single entry from the main frontage road and to prohibit vehicular access to the site from the adjoining side streets. The applicant objects to this condition, saying his tenants demand at least two points of entry and egress from the site and that there is not enough frontage on the main road for that, thus necessitating access from the side street. The council is, however, sympathetic to the neighborhood concerns and imposes the condition.

The applicant then sues to strike the condition limiting access from the side street. What condition is this condition in?

The lawyerly response is, “It depends.” But it is probably not in very good shape.

Authority to impose conditions

Special use permits allow the local government to approve a particular use if, after a detailed quasi-judicial review, the unit determines that the standards for that use are met by an individual application. G.S. 160D-102(30).

The law in North Carolina is clear that conditions can be added to special use permits by the decision-making board. The statutes specifically allow a board to impose “reasonable and appropriate conditions and safeguards” on these permits. G.S. 160D-705(c). The consent of the applicant is not required for conditions, but the applicant can always not accept the permit or carry out the work authorized if the applicant does not want to accept the condition.

Almost all of the zoning regulations adopted by North Carolina cities and counties have provisions for special use permits – 93% of the jurisdictions responding to a 2004 SOG survey  reported use of this zoning tool. The survey indicates that most all of the cities and counties that use special use permits take advantage of this authority. Only 10% of the responding jurisdictions reported that they never or only rarely impose conditions on these permits.

Limits on conditions

There are at least four important limitations on imposing these conditions —

• The regulation must provide authority and set a process to impose conditions;
• The regulation must include standards the conditions will address;
• Substantial evidence in the record must support conditions actually imposed; and
• Conditions that impose an exaction must be authorized by the statutes and must be reasonable related and proportionate to the impact of the development.

Authority and process in the local regulation

As the state statutes specifically authorize conditions, most zoning regulations do not have detailed provisions on this point. But any process in the regulation must be followed.

Northwest Property Group, LLC v. Town of Carrboro, 201 N.C. App. 449, 687 S.E.2d 1 (2009), dealt with facts not too different from the example noted above. The court of appeals addressed the issue of whether the town council had followed the process required by its ordinance to impose conditions. The key question in the case was whether the Carrboro ordinance allowed the imposition of any conditions after the town council voted to find the application met all the standards of the ordinance. A divided court held the ordinance allowed the town to do so, but remanded the case for new findings on whether the challenged condition was supported by the evidence in the record.

Standards in the regulation

A condition cannot be imposed just because the council thinks it would be a good idea or because the neighbors want it. The board does not have unlimited discretion here. Any condition that is imposed must be based on bringing the project into compliance with standards that are included in the regulation.

For example, if the regulation says a project authorized by a special use permit must not significantly increase traffic in adjoining neighborhoods, the proposed condition in our example would be within the scope of what could be required. If the regulation has a more general standard that the project not have a significant adverse impact on public safety, the traffic impacts that affect safety could be the subject of a permit condition if needed to protect public safety. But it is critical that all conditions be based on meeting a relevant standard in the regulation and that the condition reasonably relate to that standard.

Evidence in the record

This requirement is most likely to pose a problem for the contested condition in our example. When passing on special  use permits, the decision-making board takes evidence in a formal evidentiary hearing to determine if the standards are met.

The courts require that there be substantial, competent, and material evidence in the record to support the board’s findings on the permit decision. If the traffic impact analysis and testimony from the traffic engineer and town staff do not support the limit on access from the side street, where does the evidence to justify it come from? The fact that the neighbors asked for it is not enough. There must be some credible evidence presented to the board that without the condition the requirements of the ordinance would not be met. As noted in this post, this is particularly required when the issues are property value or traffic impacts.

In our example, the critical question would be whether there are facts in the record to support a conclusion that the side road access to the shopping center would create a relevant problem in meeting the requirements of the regulation. This appears doubtful. General concerns from lay witnesses — the neighbors in our example — are not competent evidence for harmful traffic impacts.

Exactions statutorily authorized and proportional

If a condition requires that the applicant provide land or improvements, or to pay the cash equivalent for that, the local government must have statutory authority to require that exaction.

G.S. 160D-705(c) provides that special use permits cannot be subject to conditions that the local government does not have statutory authority to regulate or that the courts have held to be unenforceable if imposed as a direct regulation. Specific examples cited in the statute as beyond the authority of local governments to impose include taxes, impact fees, building design standards for residential buildings, and excess driveway improvements.

The U.S. Supreme Court has held that a condition that requires the developer to make a payment, donate land, or construct improvements as a condition of a regulatory approval is limited by the Takings Clause of the Constitution. This limitation that requires that the exaction be reasonably related to the impacts of the development and be no more than an amount proportional to the impacts of the proposed project. A public need for the improvement does not justify requiring an applicant to provide it unless the need for that improvement is created by the development being proposed.

Conclusion

It is vitally important that the applicant, the neighbors, and the decision-making board understand these limitations at the outset of consideration of a special use permit. If the applicant objects to the imposition of a condition, only those conditions that meet these limitations can be imposed. Even if the applicant accepts a condition, the applicant can later challenge it in court if there was no authority to impose it or if it is an unconstitutional condition. Attention to these limitations is therefore necessary to assure that conditions needed for special use permits are lawfully imposed and enforceable.